Is interoperability really the holy grail for DLT solutions?

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Interoperability is the ability of different autonomous, heterogeneous systems, devices, or other units to communicate and collaborate with each other.

What is interoperability? And what does it have to do with DLT?

Interoperability is the ability of different autonomous, heterogeneous systems, devices, or other units (for example, organizations or countries) to communicate and collaborate with each other. DLT, aka blockchain technology, knows many different DLTs (Bitcoin, Ethereum, Ripple, etc.) that are not able to communicate with each other.

During this meetup in Utrecht ”Beatrix Theater”, organized by Sanne Visser, several speakers provided their points of view regarding this topic. The meeting started with a Q&A with Rhian Lewis.

Right: Rhian Lewis

Rhian is a senior developer in test automation and has been working with DLT for several years.

The speakers used the Mentimeter app to communicate with the audience, which worked very well. Some of the questions included:

Q) What got you involved in DLT? 

A) Trading, decentralization, pier-to-pier networks is what the motivations where at the start. Later, helping people understand the blockchain better was the biggest motivation for me. 

Q) What is interoperability?

A) Different technologies are difficult to use with different machines and languages. For instance, in a (computer) game, you should be able to trade objects (you earned or collected) on different (game) consoles, or smart contracts of different blockchains should be able to communicate with each other. In particular, the financial and retail industries are  gaining a lot with the DLT solutions. Within five years, I expect that DLT will actually be used by enterprise companies.

Q) What’s your opinion regarding banks and governments using DLT? 

A) I anticipate many issues, especially if the government starts using DLT. You can already see this happening in Japan. The government uses DLT to measure the behavior of the people. 

Q) What is an atomic swap? 

A) This is a direct transfer of tokens (value) between different networks. This becomes problematic when the networks don’t have the same value. For instance, a network with only two participants wants to do an atomic swap with a network with a million participants. The first network is very vulnerable for a 50% attach since there are only two users, you only need three users to tamper with the chain.

The second speaker was Bas Wisselink. Bas has been closely involved with blockchain projects since 2013. He has been involved in managing communities and intimately involved in the branding of the Nxt and Ardor blockchains.

According to Bas, DLT is still in development. The problem is, there are too many existing blockchain flavors, Different chains make different trade-offs based on their use case, different consensus algorithms. The solution for this issue is interoperability in different layers. Runtime-, application-, and business interoperability should be the solution.

There are two main use cases that tackle this issue: the exchange of digital assets, which includes business object interoperability and the exchange of arbitrary data, which includes application interoperability.

The last presentation was about Polkadot. This application empowers blockchain networks to work together under the protection of shared security. The difference between this system and, for example, Hyperledger is that Polkadot is public (permissionless) and Hyperledger is not.

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